Shares of Osem, which markets Nestle products in Israel,
rose 8.2 percent to 80.38 shekels at 1:42 p.m. in Tel Aviv, the
highest level since Bloomberg started tracking them in January
1994. The stock was the biggest gainer on the TA-100 Index (TA-100) as
volume climbed to 5.7 times the three-month daily average.

Osem Chairman Dan Propper sold most of his 4.99 percent
stake to Nestle at 92.67 shekels a share, a 25 percent premium
to the closing price yesterday. That builds on Nestle’s existing
59 percent stake in the Shoham, Israel-based company, data
compiled by Bloomberg show. Shares of Osem trade at 18 times
projected 12-month earnings, compared with a multiple of 13 for
the TA-100.

“The move by Nestle increases its stake to 65 percent and
some investors may believe that the next step is a tender bid by
Nestle for full control of the company,” Zach Herzog, head of
international sales at Psagot Securities in Tel Aviv, said by
phone. The price Nestle paid may be regarded as “a benchmark
for public shareholders,” he said.

A spokeswoman for Osem, who asked not to be identified
because of company policy, didn’t immediately respond to an e-mail seeking comment.

Nestle, based in Vevey, Switzerland, first acquired a stake
in Osem in 1998, according to data compiled by Bloomberg. With
the sale, Propper’s holding in the declines to less than 0.1
percent and he will stay on as chairman until the end of March
2016, Osem said in a filing to the Tel Aviv bourse yesterday.